A year after the previous movie, Marnie Piper prepares to begin a new school year in her new home. She asks the Halloweentown Witches' Council to work toward openness between Halloweentown and the mortal world. She proposes to bring a group of Halloweentown students to her own high school in the mortal world. The Council is initially apprehensive about this, mostly due to the legend of the Knights of the Iron Dagger: a fanatical knighthood who wanted to destroy all things magical. Marnie finds the idea laughable as there is no such thing as knights in the 21st century. The Council, however, agrees to accept the plan after Marnie mistakenly bets "all the Cromwell magic" that her plan will work; she was being rhetorical, not serious. If she does not prove she is right by midnight on Halloween, then her entire family will lose their magical abilities.
The Halloweentown students consisting of a witch, a warlock, a werecat, a werewolf, an ogre, a pink troll, a fairy, a zombie and a gremlin arrive. They are given magical diguises to make themselves appear human. School begins with Marnie acting as tour guide for the exchange group ("from Canada"), Aggie substitute teaching so she can be available in case of need, Cody, a new student, showing a romantic interest in Marnie, and a possible threat to the school from the Knights of the Iron Dagger. She encourages the kids to join sports teams and clubs that fit with each of their own natural skills.
While Aggie proves unable to teach any subject effectively (she keeps letting her magic take over: she conjures up a parrot in science class [a place Gwen and Marnie thought would be the safest for Aggie to be], and later we learn that a llama was produced and spat in a kid's eye, one kid was turned into a lamp post, and another lost one of their ears), the Halloweentown students keep to themselves, hiding in the refuge that Aggie magically creates for them in a remote student locker. Marnie gradually encourages the kids to join school activities and make new friends. Aggie keeps getting reassigned, failing in History and P.E.
Marnie's progress is interrupted by a warning that appears to be from the Knights of the Iron Dagger, then by a magical incident at the mall that results in the Halloweentown students assuming their natural appearances, by a break-in at the secret magical locker, and finally by the disappearance of one of the students.
Meanwhile, Marnie's developing relationship with Cody parallels an unexpected romance beginning between Aggie and the school's principal, Phil Flanagan. Aggie suspects Cody of being the cause of the trouble, and tries to convince Marnie to halt their relationship, but Marnie in turn suspects Flanagan. They eventually discover that Flanagan is the Knight in question; he was told prior to the students' arrival that he was the last of the Order.
Edgar Dalloway, head of the Witches' Council and father of one of the students, is the real root of their problems. He wants to keep Halloweentown isolated from the mortal world, and used Flanagan as a puppet to ensure the failure of Marnie's project. This, he hoped, would cause a negative reaction in Halloweentown and keep the portal between Halloweentown and the mortal world closed.
The Halloweentown students use the school's Halloween carnival to improve mortal attitudes toward magical folk. Their haunted house depicts the ordinary lives of creatures that have typically been seen as monsters in the mortal world, including displays like the "Monster Tea Party" and ogres "picnicking in their natural setting", and winds up boring the carnival goers. Gwen meanwhile uses a witch's glass to hunt down the missing student whom Dalloway imprisons.
At the school Halloween carnival, Edgar Dalloway launches magical attacks against mortal students by bringing the inanimate monsters in the haunted house to life. The ensuing damage and panic spiral beyond Marnie's and Aggie's ability to contain them, including a reanimated skeleton which grows 30 feet tall. Flanagan incites a mob to corner the Halloweentown students. Edgar appears before Aggie and Marnie, claming to have shown the mortals how monsters truly are; takes their magic as the mob breaks in. Cody asks what happened as Dalloway flees to Halloweentown and seals the portal. Cody shames the crowd, asking if they'll accept Marnie now that she's like them. The Hallowentown students reveal themselves, and the crowd accepts them for who they are, even complementing some for the contriubtions they've made to clubs. Flanagan also renounces being a knight and accepts Aggie.
Aggie takes out a witch's glass, asking if everyone saw that. Suddenly, Dalloway is thrown back out of the portal and Marnie jokingly welcomes him back. Gwen exits the portal with the student Dalloway imprisoned, with phantom projections of the Council appearing; they are angry with Dalloway for lying to them. Humans have given them a chance, so they must return the favor. Aggie and Marnie reclaim their magic from Dalloway, draining his with Gwen's assistance. The Council imprisons Dalloway in another witches glass. (At this point the series diverges from real history quite dramatically, with the existence of Halloweentown and its inhabitants becoming known to the population of Earth).
The portal between Halloweentown and the mortal world remains open in the middle of the haunted house, and crowds of kids from Halloweentown cross over to enjoy the carnival together with mortal world kids; some of the students that previously left in fear return as well. Dilan nearly shares a kiss with Natalie, the pink troll, but both decide that would be too weird. Flanagan asks Aggie to stay on as a teacher, but she has a condition - "Who heard of hockey without flying monkeys?" Gwen asks where Marnie is, but Aggie simply gives a vague answer as she looks above the haunted house. Marnie flies off for a romantic broom ride with Cody and, while flying over the carnival, they kiss.
- Kimberly J. Brown - Marnie Piper
- Debbie Reynolds - Splendora Agatha "Aggie" Cromwell
- Joey Zimmerman - Dylan Piper
- Emily Roeske - Sophie Piper
- Judith Hoag - Gwen Piper
- Lucas Grabeel - Ethan Dalloway
- Michael Flynn - Edgar Dalloway
- Finn Wittrock - Cody
- Eliana Reyes - Cassie
- Clifton Davis - Phil Flanagan
- Todd Michael Schwartzman - Pete the Werewolf
- Jessie Harward - Chester the Ogre
- Clayton Taylor - Chester's Human Disguise
- Olesya Rulin - Natalie the Pink Troll
- Jeff Olson - Six Armed Council Member
- Frank Gerrish - Pumpkinhead Council Member
- Mowava Pryor - Vampire Council Member
- Aaron Justesen - Mummy Council Member
- Frank Welker - Special Vocal Effects
- In the movie there is a serious personality change in Gwen: in the first two movies, she does not like to use her magic, but in Halloweentown High she accepts magic.
- Sophie appears only four times in the movie and does not use any magic. Because the actress is older, it makes it hard for some viewers to realize she's portraying Sophie, who was younger in appearance during the previous movie.
- In Halloweentown II: Kalabar's Revenge, the family moved into a new house, and they appear in this film to have moved again, meaning that they have been in a different house in every movie except for the fourth one as they are still living in the same house from this movie.
- Unlike the last two movies, which both took place directly on Halloween; this sequel, and the one that comes after it, takes place over the course of days that eventually lead up to Halloween. Also unlike the last two movies, which had villains that were out to take over the human world; this sequel and the one that came after it have villains that want to control Halloweentown.
- Lucas Grabeel and Olesya Rulin have been in three other movies together High School Musical, High School Musical 2, and High School Musical 3: Senior Year.
- The high school scenes, shot mostly at Juan Diego High School in Salt Lake City, Utah had to be carefully staged. This private Catholic High School is, understandably, full of Christian artwork and statues, requiring hallway scenes to be full of wall "posters" to cover any religious prints or careful camera angles to avoid any religious statues in the alcoves.
- Halloweentown series
- Halloweentown (1998)
- Halloweentown II: Kalabar's Revenge (2001)
- Return to Halloweentown (2006)